Chinese businessman Guo Wengui announces he will drop personal bankruptcy case

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Guo Wengui (also known as Miles Kwok). REUTERS/Carlo Allegri

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  • Former real estate mogul says he can’t afford Ch. 11 legal fees
  • Lender says bankruptcy filed to avoid court-ordered $254 million fine

(Reuters) – Exiled Chinese businessman Guo Wengui said he would drop his personal bankruptcy case because he says he does not have the money to cover associated legal costs.

Guo, the former real estate tycoon who fled China for the United States in 2014 before corruption charges, said in court documents filed Wednesday that he would not contest an appeal for his case from the chapter 11 being rejected by a fund that lent money to Guo’s companies.

The lender, Pacific Alliance Asia Opportunity Fund (PAX), decided to reject bankruptcy in April, arguing that Guo only filed to avoid paying fines. Guo said he had filed a request to resolve all his issues with his creditors.

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Guo filed for bankruptcy in Connecticut in February after a New York court ordered him to pay $254 million to PAX over a contract dispute. PAX originally loaned $100 million to two of Guo’s companies in 2008 for a construction project in Beijing and sued Guo when he failed to repay the loan.

Guo, who also goes by the name Ho Wan Kwok, said in Wednesday’s filing that he could no longer afford the bankruptcy court costs, blaming PAX for waging a “frenzied legal war” in its effort to reach assets, including a penthouse in New York and a luxury yacht. Guo says he doesn’t own either asset and they actually belong to his children.

Despite Guo’s own desire to end the bankruptcy, the committee representing his unsecured creditors opposed PAX’s motion to dismiss the case. The committee argued in a filing Wednesday that while PAX, as its largest creditor, could benefit from ending the case because they already have a court judgment in their favor, the rest of its 159 creditors would not have the opportunity to collect the $373.8. millions of debts they say they have.

U.S. Bankruptcy Judge Julie Manning will consider the layoff proposal on May 25.

In September, three media companies Guo is affiliated with agreed to pay more than $539 million to settle charges from the U.S. Securities and Exchange Commission for illegally selling stocks and digital assets to thousands of people. investors. One of the companies, GTV Media Group Inc, has also reportedly been linked to Steve Bannon, the former senior adviser to former President Donald Trump. Neither Guo nor Bannon have been charged with wrongdoing by the SEC.

The case is In re Ho Wan Kwok, US Bankruptcy Court, District of Connecticut, No. 50073.

For Guo: Dylan Kletter, William Baldiga, Jeff Jonas and Bennett Silverberg of Brown Rudnick

For PAX: Peter Friedman and Stuart Sarnoff of O’Melveny & Myers and Patrick Birney and Annecca Smith of Robinson+Cole

For the committee: Irve Goldman and Jonathan Kaplan of Pullman & Comley

Read more:

Chinese businessman Guo Wengui files for bankruptcy in US court

US SEC fines Guo Wengui-linked media companies for illegal securities offerings

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